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Monday, May 14, 2012

Indianapolis Builds Something Without A Plan To Pay For It, Again

If Indianapolis decides it needs a new stadium or a new airport terminal, it just builds it and worries later about how to pay for it. The IBJ is reporting on financials woes facing the Indianapolis International Airport Authority, which experienced a $31 million net operating loss last year. That's close to the nearly $40 million in added debt payments the airport authority took on to build the shiny new airport terminal. In a desperate effort to close its budget imbalance, the airport authority is looking for new ways to compete with surrounding businesses for extra revenues.

Airport board President Michael Wells, appointed to the position by Mayor Greg Ballard in January, said it has missed possible revenue by not having a gas station on airport property and by not taking more action to prepare the now-abandoned old passenger terminal site along Interstate 465 for reuse.

"Corporate America today is on a shorter time frame than ever before," Wells said. "We've been in a long period of extended planning, maybe a little more than I would have done." . . .

The airport staff is working with a developer on a contract for a gas station near its main interchange with I-70. The estimated price for the gas station and accompanying retail space is $4 million, airport spokesman Carlo Bertolini said.

The gas station is aimed at serving returning rental-car customers and airport visitors, but the airport has also sought ideas for additional tenants, such as a health care clinic, a restaurant, fitness center, commercial office space and even a pet kennel.

"We are going to have a service station. That's a very high priority of mine," Wells said. "It should have been done three years ago."

This helps explain why the airport authority has filed suit to block a private developer's plan to build a 3700-spaced covered parking facility near the airport in Decatur Township, which desperately needs additional tax-producing properties to finance the cost of its schools and local governments. The IBJ report notes that Mike Wells is not interested in pursuing the previous plan to build a hotel attached to the new airport terminal's parking garage. Wells is president of REI Real Estate Services, which developed the JW Marriott Hotel in downtown Indianapolis with the help of $60 million in public financing. By the way, didn't anyone in the local news media notice that none of the dozens of politicians who received a free weekend stay at the JW Marriott as part of its grand opening reported the value of the gift received on their financial disclosure forms?

A gas station, really? Even if the price really reams the traveler, at a dollar a gallon surcharge, you would have to sell a million gallons a year to pay a significant "tax" to the airport authority. About 3000 gallons per day (200 to 400 fill-ups), and even then, all you are doing is shifting the gas purchase from Marion county to the airport.

The airlines did NOT want the new Indy airport because of the increased fees. The airport will NOT significantly reduce taxi times as was promised. If the debt cannot be satisfied through airline fees, Hoosier taxpayers are on the hook for the debt.

The decision-making process behind building a new airport went like this: in 2002, Bart Peterson required a "pep talk" from Lacy Johnson - who as a political hack knows nothing about airports - to feel good about the $1 billion we're throwing away:

http://archives.californiaaviation.org/airport/msg23930.html

The new airport serves less than one-tenth the passengers that Atlanta's airport serves, if that puts things in perepsecitve. As of 2010, Indy had the 50th busiest airport in the US, after a 5 year downward trend:

Note that traffic operations DROPPED 10 percent from 2005 to 2010. How could that be ? Ask yourself why people use an airport. It's for business, or to go to/from a vacation, or to go off to a personal event like school or a funeral. Business in Indy has tanked - there's only one Fortune 500 business here and they (Lilly) have layed off tens of thousands? NObody comes here for vacation because there's no beach and no ocean. SO the long term use of the airport is flat at BEST, because as population grows, businesses will rely less and less on flying and more on teleconferencing.

The airport is a boondoggle designed to make certain people rich. Just like the Colts stadium and the convention center expansion and the library. None of this stuff is more important than "quality of life" and keeping taxes low - two things that *would* attract more business.

Airports = a lot of concrete. The head of the city-county council when the airport was approved was Monroe Gray, who owns a concrete company. The then-mayor owns a construction company.

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